Predicting Cost Performance of Construction Projects from Projects Procurement Procedure

Abstract

The purpose of this paper is to show by multivariate regression model if a defective procurement procedure leading to a contract award affects the smooth execution of a project in terms of its cost performance on the strength of the significance of the model. This investigation was conducted with a quantitative method of research by administering questionnaires to key industry players (clients, consultants, and contractors) engaged in construction projects (both civil and building works) in assessing contract award procedures, conditions for contract award after tender evaluation and criteria for contractors’ prequalification. Data from their field survey was analysed with mean item score to show hierarchal importance of factors and critical evaluation using multivariate analysis of variance. Findings showed that a poor and inappropriate contract award procedure has divergence from efficient project cost management based on the corollary of mean score values of contract award procedures, conditions for the award and prequalification test. The practical implication of this, is that an unbiased contract award procedure will apparently lead to a lesser strenuous project management effort towards mitigating cost spills and overruns for a lesser project abandonment if the right contractor with the right capabilities is awarded the contract. These implications stem from the originality of the investigation arising from F-value statistics (7.406), t-value statistics (3.046), and p-value of 0.003.

Keywords

• cost performance
• procurement
• construction project
• contract award
• bid evaluation
• prequalification